The India consumer electronics market is expected to reach $118.4 billion in 2025, according to a new report by Grand View Research, Inc. Rising disposable income, rapid urbanization as well as the introduction of novel products in the market is expected to further contribute to the market growth.
The demand for flat refrigerators, washing machines, and TVs is rising with a decline in penetration of products vis-à-vis global levels, urbanization, and increasing disposable income of consumers. There has been an increase in imports from regions such as China and South-East Asia, considered to be low-cost regions, owing to certain free-trade agreements, and availability of low-cost products, in relation with costs about local manufacturing. To effectively suffice the rising local demand and export demand to the neighboring regions and the Middle East and Africa, global market participants are planning to expand their local manufacturing in India, thus making it an export hub.
However, presently the Indian manufacturers are facing challenges such as, inverted duty structure due to free trade agreements, which makes Indian manufacturing uncompetitive for white goods, including ACs, refrigerators and washing machines. The non-applicability of Modified Special Packages Scheme (MSIPS) in several consumer durables; hiked excess duties, under-developed and insufficient local supplier base; and high-cost of manufacturing and capital costs owing to frequently changing energy efficiency requirements also contribute to this scenario.
The drivers contributing to the growth of this market relate to increasing levels of income and urbanization, improved affordability of products, product innovation, availability of newer variants of products, easy consumer financing, and rise in the share of organized retail. Increasing local value addition levels and growing investment will observe a manifold jump, as an increasing number of OEMs are foreseeing the localization of their products in India.
Further key Findings from the Study Suggest:
- India possesses the availability of talented workforce and superior design capabilities, at nearly 140% lower wages than China, which will help in strengthening the country’s position as a potential domestic-cum-export-oriented production base globally.
- The enormous electronics domestic demand is likely to emerge as a key trigger necessitating the establishment of a local ecosystem.
- Programs and policies, such as, Make-in-India, Digital India, Jan Dhan Yojana, Swacch Bharat Abhiyan, Domestic Efficient Lightning Programme, Smart Cities, Modified Special Incentives Package Scheme, etc. are likely to positively impact the electronics manufacturing growth in India.
- Reliance on imports for critical electronic components and inadequate testing facilities in the country are some anticipated weaknesses for the market in the forecast period.